The Bihar Co-operative Societies Act, 1935

 
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The Bihar Co-operative Societies Act, 1935 
 
Act No 6 of 1935 
 
[Dated 29th May 1935] 
 
An Act to consolidate and amend the law relating to Co-operative Societies in the State of Bihar [* * *] 
Preamble.  -  Whereas  it  is  expedient  to  facilitate  the  formation,  working  and  consolidation  of  co- 
operative societies for the promotion of thrift, self help and mutual aid among agriculturists and other 
persons with common needs and for that purpose to consolidate and amend the law relation top co- 
operative societies in the State of Bihar [* * *] 
And whereas previous sanction of the Governor-General under sub-section (3) of Section 80-A of the 
 
Government of India Act has been obtained to the passing of this Act; 
It is hereby enacted as follows: 
 
CHAPTER I 
 
 
Preliminary 
 
 
1. Short title and extent. - (1) This Act may be called the Bihar Co-operative Societies Act, 1935. 
(2) It extends to the whole of the State of Bihar. 
2. Definitions. - In this Act, unless there is anything repugnant in the subject or context- 
 
(a) 'bye-laws' means the registered bye-laws for the time being in force and includes a registered 
amendment of the bye-laws; 
(b) 'Co-operative Federation' means a registered society the main object of which is to co-ordinate 
and  facilitate  the  activities  of  other  registered  societies  and  to  foster  the  growth  of  the  co- 
operative movement; 
 
[(bb) 'Co-operative  Year'  means  a year  beginning  with the [1st April]  and  ending  on  the  [31st 
March];  
[(c) 'financing bank' means the State Bank of India, a nationalised Commercial Bank, a State Co- 
operative Bank, a Co-operative Bank, a Land Development Bank, a Regional Rural Bank or any 
other bank to be notified by the State Government the objects of which include the creation of 
funds out of which money is to be lent to the co-operative societies or other institutions or both;] 
 (d) 'liquidator'  means  a person  or persons  appointed  by the Registrar  under sub-section  (1) of 
Section 44 to wind up the affairs of a registered society;  
(e) 'managing committee' means the committee of management or other body to whom the 
management of the affairs of a registered society is entrusted; 
(f) 'member'  includes  a person  joining in the application  for the registration  of a society  and a 
person admitted to membership after registration in accordance with the rules and the bye-laws 
of such society; 
 
[(ff) 'Multi-purpose Co-operative Society' is a primary society formed for providing more than one 
type  of  service  to  its  members  and  includes  a  society  registered  as  a  Cane-growers'  Co- 
operative Society;] 
 
[(fff) 'nominal or associate member' means a member who possesses such privileges or rights of a 
 
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member of a society, and who is subject only to such liabilities of a member as may be specified 
by the bye-laws;] 
(g) "Officer" includes a Chairman, Secretary, Treasurer, member of a managing committee or any 
other person empowered by or under this Act, or the rules or the bye-laws of registered society 
to give direction in regard to the business of the Society; 
 
[(gg)  'Office-bearer  of  a  managing  committee'  means  and  includes  the  Chairman,  the  Vice- 
Chairman, the Secretary, the Joint Secretary, the Treasurer or any such functionary by whatever 
name he may be designated;] 
 
[(ggg) 'primary society' is a society of which no member is a registered society;] 
 
[(gggg) 'Primary  agricultural'  credit society'  means  a co-operative  society,  the primary  object  of 
which is to render assistance, financial or otherwise, to farmers, rural artisans and agricultural 
labourers and includes farmers service society and multipurpose co-operative society;] 
 
(h) 'registered society' means a society registered or deemed to be registered under this Act;  
(i) 'Registrar' means a person appointed to perform the duties of Registrar of Co-operative Societies 
under this Act; 
(j) 'rules' means rules under this Act. 
 
3. Indian Companies Act, [1913] not to apply. - The provisions of the [Indian Companies Act, 1913 (7 
of 1913)] shall not apply to registered societies. 
4. Saving of existing societies. - (1) Every society now existing which has been registered under the 
Co-operative Societies Act, 1912 (2 of 1912), shall be deemed to be registered under this Act and its 
bye-laws shall, so far as they are not inconsistent with the express provisions of this Act, continue in 
force until altered or rescinded. 
(2) All appointments, rules and orders made, notifications and notices issued, all transactions entered 
into, suit and other proceedings instituted under the said Acts, shall be deemed, so far as may be to 
have been respectively made, issued, entered into and instituted, under this Act. 
5. Construction of references to Co-operative Societies Act, 1912 in enactments. - All references 
to the Co-operative Societies Act, 1912 (2 of 1912) occurring in any enactment made by any authority 
in India and for the time being in force in the State of 'Bihar [x x x] shall, in the application of such 
enactment to the said States be construed as references to this Act. 
 
CHAPTER II 
 
 
Registration of Societies 
 
 
6. The Registrar. - (1) The State Government may appoint a person to be Registrar of Co-operative 
 
Societies for the State or any portion of it, and may appoint persons to assist such Registrar. 
 
(2) The State Government may, by general or special order published in the official Gazette, confer- 
 
(a) on any person appointed under sub-section (1), to assist the Registrar, all or any of the powers 
of the Registrar under the Act except the powers under Section 26, [xxx] and 
 
(b) on any Co-operative  Federation or Financing Bank all or any of the powers of the Registrar 
under Section 20, sub-section (3) of Section 28 and Section 33. 
 
[(3) Where the State Government is of opinion that the Registrar needs the assistance of Additional 
 
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Registrar for speedy disposal of business, it may by order published in the official gazette, appoint such 
number of Additional Registrars as it may deem fit. 
(4) Notwithstanding anything to the contrary contained in any other provisions of the Act, the Registrar 
may delegate, transfer or assign to the Additional Registrar such of his powers and functions and duties 
as he may  consider  necessary  including  the power  under  Sections  26 and 50 and the Additional 
Registrar shall, thereupon have powers of Registrar in matters so delegated, transferred or assigned to 
him.] . 
7. Societies which may be registered.  - [(1) Subject to the provisions of this Act, a Co-operative 
Society constituted in accordance with the provisions of the said Act as amended from time to time, 
which  has  as  its  object,  the  promotion  of  the  common  interest  of  its  members  and  securing  the 
fulfilment of any or all directives contained in Part IV of the Constitution of India, may be registered 
under this Act with or without limited liability.] 
(2) Where the liability of a society is limited, the liability of each member, past member, or the estate of 
a deceased member shall on liquidation, be limited to the amount, if any, unpaid on the shares held by 
such member, or where the liability is limited by guarantee, to the amount of such guarantee, or where 
it is limited in any other manner, then as may be determined by the rules or bye-laws subject, however, 
to the provisions of Section 32. 
(3)  Where  the  liability  of  a  society  is  unlimited,  all  members,  past  members,  and  the  estates  of 
deceased  members  shall on liquidation,  be jointly  and severally  liable  for and in respect  of all its 
obligations, subject, however, to the provisions of Section 32. 
8. Conditions of registration. - (1) No society, other than a society of which a member is registered 
society, shall be registered under this Act which does not consist of at least ten persons above the age 
of eighteen years and, where the primary object of the society is the creation of funds to be lent to its 
members, unless such persons- 
(a) reside in the same town or village or in the same group of villages; or 
(b) save where the Registrar otherwise directs, are members of the same tribe, class or occupation. 
[(1A) The State Government may by notification in the Official Gazette reduce the minimum number of 
membership of 10 persons for particular class of Co-operative Societies.] 
 
(2) The word "limited" shall be the last word in the name of every society with limited liability registered 
under this Act. ( 
9. Application for registration. - (1) An application for the registration of a society shall be made to 
the Registrar, and shall be accompanied by a copy of the proposed bye-laws of the society and the 
persons by whom or on whose behalf such application is made shall furnish such information in regard 
to the society as the Registrar may require. 
(2) The application shall be signed- 
 
[(a) if none of the applicants  is a registered  society by at least ten persons or less number of 
persons qualified in accordance with the requirements of sub-section (1) or sub-section (1-A) of 
Section 8:] 
(b) if any of the applicants is a registered society, by a duly authorised person on behalf of every 
such registered societies, and where all the members of the society are not registered societies 
by ten other members or, where there are less than ten other members, by all of them. 
 
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10. Power of Registrar to decide questions. - When any question arises whether for the purposes of 
this Act a person is an agriculturist, or non-agriculturist, or whether any person is resident in a particular 
town or village or group of villages, or whether two or more villages shall be considered to form a group 
or whether  any  person  belongs  to any  particular  tribe,  class  or occupation,  the  question  shall  be 
decided by the Registrar, whose decision shall be final. 
11. Registration. - (1) If the Registrar is satisfied that a society has complied with the provisions of this 
Act and Rules and that its proposed bye-laws are not contrary to this Act or to the Rules, he may, if he 
thinks fit, register the Society and its bye-laws. 
(2) If the Registrar refuses to register a society he shall record his reasons for such refusal. 
 
(3) An appeal shall lie to the State Government from an order of the Registrar refusing to register a 
society, within two months from the date of the receipt of the order by at least one of the applicants. 
12. Evidence of registration. - A Certificate of registration signed by the Registrar shall be conclusive 
evidence that the society therein mentioned is duly registered unless it is proved that the registration of 
the society has been cancelled. 
 
CHAPTER III 
 
 
Incorporation, Duties and Privileges of Registered Societies 
 
 
13. Societies to be bodies corporate. - The registration of a society shall render it a body corporate 
by the name under which it is registered, with perpetual succession and a common seal and with power 
to acquire and hold property, to enter into contract, to institute and defend suits and other legal 
proceedings and to do all thing necessary for the purposes for which it is constituted. 
[13A. Promotion of Co-operative movement by Government. - (1) It shall be the duty of the State 
Government to encourage and promote the co-operative movement in the State and to take such steps 
in this direction as may be necessary. 
(2)  Without  prejudice  to  the  generality  of  the  provisions  contained  in  subsection  (1),  the  State 
 
Government may,-  
(a) with a view to aid the growth of a registered society in general or of any class of registered 
societies subscribe directly to the share capital of a registered society; 
 
(b) assist indirectly in the formation and augmentation of the share capital of a registered society; 
 
(c) give loans or make advances to a registered society or guarantee repayment of principal and 
payment of interest on debentures  issued by a registered society or guarantee repayment  of 
principal and payment of interest on loans or advances to a registered society.] 
 
14. Registered societies to have a managing committee etc. - (1) Every registered society shall 
have an address, registered in accordance with rules, to which all notices and communications may be 
sent, and shall send notice, in writing to the Registrar and to the financing bank, if any, of which it is a 
share holder and to the Co-operative Federation, if any, of which it is a member, of any change in the 
said address within fifteen days of such change. 
(2) The management  of registered Society shall be vested in a managing committee  constituted  in 
accordance with the rules: 
 
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[Provided that on the Managing Committee of such Societies or class of societies and in such areas as 
the State Government may by general or special order direct, at least two seats shall be reserved for 
the members belonging to the Scheduled Castes or Scheduled Tribes and three seats for small or 
marginal farmers in such manner as may be determined by the State Government and that the seats so 
reserved shall be filled up from amongst the members of the Scheduled Castes or Scheduled Tribes 
and small or marginal farmers either by election or by co-option or by nomination by the Registrar, Co- 
operative Societies: 
Provided further that if some members of these categories are elected by general election then the 
number of reserved seats shall be reduced to that extent, this provision shall be effective from the 
primary society to the Apex Society. But this shall not be effective for the commercial societies: 
Provided  also that if no person  belonging  to Scheduled  Castes  or Scheduled  Tribes  and small or 
marginal farmers is a member of the Society, the society shall enrol at least two persons from the 
Scheduled Castes or Scheduled Tribes and three persons from the small or marginal farmers as its 
members from the area of its operation and co-opt them as members of the Managing Committee.] 
[(3) An Officer of the State Government if deputed to a registered society either as a Managing Director, 
Executive  officer  or in similar  position  shall be the Chief Executive  thereof  and subject  to general 
direction and control of the Managing Committee, shall have the following powers and functions:- 
(i) to have general control over the administration of the registered society; 
(ii) to convene meetings of the Managing Committee; 
(iii)  to  receive  all  moneys  and  securities  on  behalf  of  the  registered  society  and  to  make 
arrangement for the proper maintenance and custody of cash balances and other properties of 
the registered society; 
 
(iv) to endorse and transfer promissory notes, Government and other Securities and to endorse, 
sign and negotiate cheques and other negotiable instrument on behalf of the registered society; 
(v) to be responsible  for the  general  conduct,  supervision  and  management  to the  day-to-day 
business and affairs of the registered society; 
 
(vi) to sign all deposits, receipts and operate the accounts of the registered society with Bank;  
(vii) to sign all bonds and agreements on behalf of the registered society; 
(viii) to determine the powers, duties and responsibilities of the employees of the registered society; 
(ix) to appoint, promote, transfer, punish, suspend, remove or dismiss any paid employee of the 
registered society except to the extent of the powers vested in the Managing Committee under 
the bye-laws of the registered society; 
 
(x) to institute, conduct, defend, compound or to withdraw any suit or other legal proceedings for or 
against the registered society and also to compound and allow time for payment to satisfaction of 
any claims; 
 
(xi) to delegate all or any of the powers to an employee or employees of the registered society 
subject to his control and supervision. 
 
(4) Notwithstanding anything contained in any provision of this Act, the Rules framed thereunder or the 
bye-laws of any registered Society where the State Government has- 
(a) subscribed directly to the share capital of a registered Society; or 
 
 
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(b) assisted indirectly in the formation or augmentation of the share capital of a registered society; 
or 
 
(c) given loans or made advances to a registered society or guaranteed the re-payment of principal 
and payment of interest on debentures issued by a registered society for or guaranteed the re- 
payment of principal and payment of interest on loans or advances to a registered society; 
 
In that case the State Government shall have the right to nominate on the Managing Committee of such 
registered society not more than two persons one of whom shall be a Government servant, but the said 
Government servant shall have no right to vote in the election of the office-bearers of the registered society: 
Provided that notwithstanding the foregoing provisions contained in subsection (4) (a), (b) and (c)- 
 
(i) Where the share of the State Government in the share capital of such registered society exceeds 
thirty percent but does not exceed fifty percent, the State Government shall have the right to 
nominate  upto  one  third  of  the  total  number  of  the  members  of  the  Managing  Committee 
including the Chairman; and such right once accrued shall continue until the share of the State 
Government  in the share capital of the registered society goes down to less than twenty-five percent; 
(ii)  Where  the  share  of  the  State  Government  in  the  share  capital  of  such  registered  society 
exceeds  fifty  per  cent,  but  does  not  exceed  sixty  percent  of  the  total  share  capital  of  the 
registered  society,  the  State  Government  shall  have  the  right  to  nominate  such  number  of 
members of the Managing Committee including the Chairman, as is nearest up to one-half of the 
total, and such right once accrued shall continue until the share of the State Government in the 
share capital of the registered society goes down to less than forty percent; 
 
(iii)  Where  the  share  of the  State  Government  in the  share  capital  of such  registered  society 
exceeds sixty per cent, the State Government shall have the right to nominate upto two-third of 
the total number of members of the Managing Committee including the Chairman, and such right 
once accrued shall continue until the share of the State Government in the share capital of the 
registered society goes down to less than fifty-five per cent: 
 
Provided that notwithstanding anything contained in provisos (i), (ii) and (iii) of sub-section (4), the State 
 
Government shall not nominate Chairman and other members of the Managing Committee if the share 
 
capital subscribed  to by the State Government  in a registered  society  is less than fifteen lakhs of rupees: 
Provided further that where the bye-laws of a registered society so provide, the State Government or 
the Registrar, as the case may be, may nominate more than two third members including office bearers 
of the Managing Committee on such terms and conditions as may be prescribed in the bye-laws: 
Provided  further  also  that  the  Government  shall  nominate  members  of  the  Managing  Committee 
including the Chairman as far as possible from amongst persons- 
(i) having interest in co-operative movement; or 
 
(ii) having knowledge and experience of organising or managing co-operative societies; or 
 
(iii) having experience of general administration; or  
(iv) is the member of such registered society; or 
 
(v) is or was  associated  with  the administration  and  implementation  of the Bihar  Co-operative 
Societies Act. 
 
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(5) Notwithstanding anything contained in any provision of this Act, rules made thereunder and the bye- 
laws of the society, the existing Managing Committee of a registered society in respect of which the 
State Government has power to nominate Chairman and other members of the Managing Committee in 
accordance  with  provisos  (i),  (ii) and  (iii)  of sub-section  (4)  shall  cease  to exist  from  the  date  of 
promulgation of Ordinance No. 17,1988 and its management shall vest in the State Government. The 
State Government shall appoint an Administrator for the management of the affairs of such registered 
society till the Managing Committee is constituted in accordance with the provisions of this Act. 
(6)(a) The Administrator so appointed under sub-section (5) shall hold the elections within six months of 
his appointment: 
Provided that the State Government, in special circumstances, after recording the reasons in writing, 
may extend the period from time to time, but not exceeding six months at a time over and above the 
prescribed period. 
(b) The State Government shall nominate the members of the Managing Committee including the 
Chairman under provisos (i), (ii) and (iii) of sub-section (4) within the said period. 
 
(7) Notwithstanding  the  provisions  of re-numbered  sub-section  (9) the  nominated  members  of the 
Managing Committee including the Chairman shall hold office during the pleasure of the State Government. 
(8) Notwithstanding anything contained in any provision of this Act, rules made thereunder and the by- 
laws of a registered society, no person shall be eligible for election or nomination as an office-bearer of 
the Managing  Committee  of a registered  society  if he has been an office bearer  of the Managing 
Committee for two consecutive terms: 
Provided that such person may be eligible for election or nomination as an office-bearer of the said 
Managing Committee at the interval of three Co-operative years after having been the office-bearer of 
that Managing Committee for two consecutive terms.] 
(9) Notwithstanding anything contained in the rules or bye-laws of a registered society, the term of the 
members and the office-bearers of the managing committee of a registered society shall be three co- 
operative years, and they shall continue to hold office after expiry of their term till the elections are held 
or for [nine months] from the close of the co-operative year, whichever is earlier. 
(10) If, for any reason, elections are not held within the said period after expiry of the term of the 
members and the office-bearers of the managing committee, the committee shall be deemed to have 
been superseded with effect from the said date within the meaning of section 41, and thereafter the 
business of the society shall be carried on in the manner provided by the section: 
Provided that irrespective of the date when the election is so held, the term of the members and the 
office-bearers of the managing committee shall be deemed to have commenced from the beginning of 
the co-operative year in which the elections are held: 
Provided further that the members and the office-bearers who have held their respective offices beyond 
the period specified under sub-section (3) before coming into force of the Bihar Co-operative Societies 
(Sixth Amendment) Ordinance, 1974 shall be deemed to have validly held their respective offices: 
Provided also that the members and the office-bearers of the managing committee of the registered 
society,  who  have  completed  their  terms  of  office  before  promulgation  of  the  Bihar  Co-operative 
 
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Societies (Sixth Amendment) Ordinance,1974, other than those office-bearers who have ceased to hold 
office under sub-section (7), shall continue to hold their respective offices, till the expiration of 180 days 
from the date of promulgation of the said Act or till the election of the new office bearers, whichever is 
 
earlier.] 
 
(11) Every registered society shall keep open to inspection free of charge at all reasonable times at its 
registered address- 
(a) a copy of this Act, 
 
(b) a copy of the rules governing such society, 
(c) a copy of the bye-laws of such society, and 
(d) a register of its members: 
Provided that if at any time it is found that the representation of the Scheduled Castes and Scheduled 
Tribes and marginal and small farmers on the managing committee of a society is not to the extent as 
prescribed in the proviso to subsection (2) the State Government may by notification nominate such 
members  of  Scheduled  Castes/Scheduled  Tribes/Small  and  Marginal  Farmers  as  member  of  the 
Managing Committee of the society as may be required to give them adequate representation,  and 
such nominated members may be in addition to the existing total number of members of the managing 
committee and they will hold office till the next general election of the society.] 
15. Restrictions on borrowing. - A registered society shall receive deposits and loans from members 
and non-members only to such extent and under such conditions as may be prescribed by the rules or bye-laws. 
16. Restrictions on lending. - (1) Except with the general or special sanction of the Registrar and 
subject to such restrictions as he may impose, a registered society shall not- 
(a) make a loan to any person other than a member, or  
(b) lend money on the security of movable property. 
 
(2) The State Government may, by general or special order, prohibit or restrict the lending of money or 
mortgage of immovable property by registered society or class of registered societies. 
[(3) Where the Registrar has accorded sanction to a financing bank under the provisions of sub-section 
(1), a registered society which is a member of such financing bank may, subject to the terms of the 
sanction and such other terms and conditions as may be prescribed by the Registrar, act as agent for 
the financing bank and as such agent carry out, with or without any commission, all or any transactions 
connected with loans or advances made or to be made by the financing bank.] 
17. Restrictions on other transactions with non-member. - The transactions of a registered society 
with persons other than members shall be subject to such further prohibitions and restrictions, if any, as 
the State Government may by rules prescribe. 
18. Reserve Fund. - (1) At least thirty-five precent of the net profits of a registered society shall each 
year be carried to reserve fund, provided that be State Government may by rule increase or decrease 
this proportion for any Society or class of Societies. 
(2) The reserve fund shall not be used in the business of the society except to such extent and in such 
manner as may be prescribed by the rules. 
(3)  Any  portion  of  the  reserve  fund  not  used  in  the  business  of  the  society  shall  be  invested  or 
 
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deposited  in one  or more  of the  ways  specified  in section  19 subject  to such  rules  as the  State 
Government may make in this behalf. 
19. Investment of funds. - Subject to the provisions of sub-section  (2) of Section 16, a registered 
 
Society may invest or deposit its funds- 
(a) in a Government Saving Bank; or 
(b) in any of the securities specified in Section 20 of the Indian Trust Act, 1882 (2 of 1882); or 
 
(c) with the general or special sanction of the Registrar and on such conditions as he may impose- 
(i) in the shares or on the security of any other registered society; or 
(ii) with any bank or person carrying on the business of banking approved for this purpose by 
the Registrar; 
(d) in any other mode permitted by the rules. 
 
20. Contribution to charitable purpose. - Any registered society may after the amount required by 
sub-section (1) of Section 18 or by any rule has been carried to the reserve fund, contribute an amount 
not exceeding ten percent of the net profits to any charitable purpose, as defined in section 2 of the 
Charitable Endowments Act, 1890(6 of 1890): 
Provided that the Registrar may, by general or special order, prohibit any society or class of societies 
from making any condition under this Section. 
21. Restrictions on division of funds. - No part of the funds of a registered society shall be divided by 
law of bonus or dividend or otherwise among its members: 
Provided  that after the amount required  by sub-section  (6) of Section 18 or by any rule has been 
carried to reserve fund, the balance of the net profits, if any, together with any available profits of past 
years, may be distributed as dividend among members or paid as bonus or remuneration to a member 
for any specific service rendered to the society or used for the common benefit of members to such 
extent and under such conditions as may be prescribed by the rules or bye-law. 
22. Charge and set off in respect of shares or interest of members. - A registered society shall 
have a charge upon the share or interest in the capital and on the deposits or contribution of a member, 
past member or deceased member and upon any amount payable out of profits to a member or past 
member or to the estate of a deceased member to the society, and may set off any sum credited or 
payable to a member, past member or the estate of a deceased member in or towards payment of any 
such debt. 
23. Prior claim of society. - Subject to claim of the Government in respect of land revenue or any 
money recoverable as land revenue or as a public demand or any claim of landlord in respect of rent or 
any money recoverable as rent, any debt or outstanding demand due to a registered society from any 
member, past member, or the estate of deceased member, shall be a first charge- 
(a) if the demand is due in respect of the supply of or any loan granted for the purchase of seed or 
manure  upon  the  crops  or  other  agricultural  produce  of  such  member  or  past  member  or 
belonging to the estate of such deceased member, at any time within two years from the date on 
which the last instalment of such supply or loan shall become re-payable. 
(b) if the demand is due in respect of the supply of, or any loan granted for the purchase of, cattle, 
fodder  for  cattle,  agriculture  or  industrial  implements  or  machinery  or  raw  materials  for 
 
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manufacture upon cattle or thing so supplied, or purchased, the whole or any part from any such 
loan or upon any articles manufactured from raw materials so supplied or purchased. 
 
[23A.  Application  of Section  23 to non-members.  - Any  debt  to outstanding  demand  due  to a 
registered society, authorised under clause (a) of sub-section (1) of Section 16, from any non-member 
or estate of a deceased non-member, shall be a first charge on the property of the non-member or 
belonging to the deceased nonmember to the same extent and subject to the same claims, conditions 
and restrictions as debt or outstanding demand due to a registered society from any member or the 
estate of a deceased member is under Section 23, a first charge on the property of the member or 
belonging to the estate of the deceased member.] 
24. Transfer  of interest  on death of member.  - (1) A registered  society,  may on the death of a 
member,  transfer  his  share  or  interest  in  the  capital  of  the  society  to  the  person  nominated  in 
accordance with the rules or, if there is no person so nominated, to such person as may appear to the 
society or, managing committee  to be the heir or legal representative,  as the case may be, a sum 
representing the value of such member's share or interest, as ascertained in accordance with the rules 
or bye-law: 
Provided that- 
 
(i) In the case of society with unlimited liability, such nominee, heir or legal representative as the 
case may be, may require payment by the society of the value of the share or interest of the 
deceased member ascertained, after, deducting the amount of any charge existing under Section 
22; 
 
(ii) in the case  of society  with limited  liability,  the society  shall  transfer,  subject  to any charge 
existing under Section 22, the share or interest of the deceased member to such nominee, heir 
or legal representative,  as the case may be, being qualified in accordance with the rules and 
bye-laws for membership of the society or in his application within three months of the death of 
the deceased member, to any person specified in the application who is so qualified: 
Provided further that no payment of sum in excess of rupees one hundred shall be made to any such 
heir or legal representative  who has not been nominated in accordance with the rule, until after the 
decision under Section 48 of any claim which may, within that period be made by any other person. 
(2) Subject as aforesaid, a registered society may pay all other money due to deceased member from 
the society to such nominee, heir or legal representative, as the case may be. 
(3) All transfers and payments, made by a registered society in accordance with the provisions of the 
 
Section shall be valid and effectual against any demand made upon the society by other person. 
 
[24A. Power of Registrar to sanction compromise between a registered society and its creditors. 
 
- (1) Notwithstanding anything contained in this Act, where a compromise or arrangement is proposed 
between  a  registered  society  and  its  creditors  or  any  class  of  them,  the  Registrar  may  on  the 
application in a summary way of the society or of any creditor, or in the case of society in respect of 
which an order of winding up has been passed, if the liquidator, order a meeting of the creditors or 
class of creditors as the case may be, to be called, held and conducted in such manner as may be 
prescribed by rules. 
(2) If a majority in number representing three-fourths in value of the creditors, or class of creditors, as 
the case may be, present either in person or by proxy at the meeting, agree to any compromise or 
arrangement,  the compromise  or arrangement  shall, if sanctioned  by an order of the Registrar,  be 
 
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binding on all the creditors or the class of creditors, as the case may be, and also on the society. In the 
case of a society in respect of which an order of winding up has been passed, on the liquidators and on 
all persons who have been or may be required by the liquidator acting under clause (c) of sub-section 
(3) of Section 44 to contribute to the assets of the society.] 
[(3) If at any time it appears to the Registrar that it is expedient that any compromise or arrangement 
between  a  registered  society  and  its  creditors  or  any  class  of  them,  which  has  become  final  in 
accordance with the law in force on the date of the commencement of the Bihar Co-operative Societies 
(Amendment) Act, 1942 (Bihar Act 7 of 1942), or which was, after the date sanctioned by the Registrar 
under sub-section (2) of this section, should, in the interest of society or of its creditors or of the said 
class of creditors, be revised or replaced by a fresh compromise or arrangement, he may either of his 
own motion or on the application of the society, order a meeting of the creditors or class of creditors, as 
the case may be, present either in person or by proxy at the meeting, agree to the revision of the 
previous compromise or arrangement, or to any fresh compromise or arrangement, the Registrar may 
sanction such revised compromise or arrangement or such fresh compromise or arrangement. 
(4) Any revised compromise or arrangement or fresh compromise or arrangement sanctioned under 
sub-section (3) may be revised or replaced by a fresh compromise or arrangement in the like manner 
and subject to the like conditions as a compromise or arrangement may be revised or replaced by a 
fresh compromise or arrangement under sub-section (3). 
(5) Any revised compromise or arrangement or fresh compromise or arrangement sanctioned by the 
Registrar under sub-section (3) or sub-section (4) shall be binding on all the creditors or the class of 
creditors, as the case may be, and also on the society. 
(6) A compromise or arrangement under sub-section (2) or a revised compromise or arrangement or a 
fresh compromise  or arrangement  under sub-section  (3) or subsection  (4) shall not be liable to be 
challenged, set aside, modified, revised or declared void in any Court, upon merits or upon any ground 
whatsoever except want of jurisdiction. 
(7) The order of the Registrar calling a meeting of creditors or class of creditors, as the case may be, 
under sub-section (1) or sub-section (3), and the order of the Registrar sanctioning a compromise or 
arrangement under sub-section (2) or a revised compromise or arrangement or a fresh compromise or 
arrangement under sub-section (3), or sub-section (4) shall be published in the official Gazette.] 
25. Amendment of the bye-laws of a registered society. - (1) No amendment of the bye-laws of a 
registered society shall be valid until the amendment has been registered under this Act. 
(2) If the Registrar is satisfied that an amendment of the bye-laws is not contrary to this Act or to the 
rules, he may register the amendment. 
(3) When the Registrar registers an amendment of the bye-laws of a registered society, he shall issue 
to the society a copy of the amendment certified by him, which shall be conclusive evidence that the 
amendment has been duly registered. 
26. Power of Registrar to direct amendment  of the bye-laws of a registered society. - (1) If it 
appears to the Registrar that an amendment of the bye-laws of a registered society is necessary or 
desirable in the interest of such society, he may, by order in writing to be issued to the society, by 
registered post, require the society to make the amendment within such time as he may specify in such order. 
 
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(2) If any society fails to make any such amendment within the time specified, the Registrar may, after 
giving the society an opportunity of being heard, register such amendment, and issue to the society by 
registered post a copy of the amendment, certified by him, which shall be conclusive evidence that the 
amendment has been duly registered, and such amendment shall be binding on the members of such society. 
(3) An appeal shall lie to the State Government from any order of the Registrar passed under sub- 
section  (2)  within  two  months  from  the  date  of  the  issue  of  such  order.  The  order  of  the  State 
Government on appeal and, subject to the result of such appeal, if any, the decision of the Registrar 
shall be final. 
 
CHAPTER IV 
 
 
Rights and Liabilities of Members of Registered Societies 
 
 
27. Member not to exercise rights till due payment made. - No member of a registered society shall 
exercise the rights of a member unless or until he has made such payment to the society in respect of 
membership or acquired such interest in the society, as may be prescribed by the rules or bye-laws: 
[Provided that in case of multipurpose co-operative society a member may exercise the right to vote at 
the election of members of the managing committee of society notwithstanding  his not having made 
payment in respect of the membership of the society.] 
28. Votes of members. - [(1) Subject to the provisions of sub-section (2) of this section and of sub- 
section (4) of Section 14 each member of a registered society shall have one vote only as a member in 
the affairs of the society, provided that in the case of an equality of votes, the Chairman shall have a 
casting vote.] 
(2) A registered society which is a member of any other registered society shall have as many voters as 
may be prescribed by the bye-laws of such other society and may, subject to such bye-laws, appoint 
any number of its members, not exceeding the number of such votes, to exercise its voting power, 
provided  that  no  member  who  is  disqualified  for  such  appointment  under  any  rule  shall  be  so appointed. 
(3) Save as provided in sub-section (2), voting by proxy shall not be allowed except with the general or 
special sanction of the Registrar for any society or class of societies. 
29. Restriction on holding of members. - No member of a registered society [other than the State 
Government or another registered society, shall have or claim any interest in the capital of a registered 
society exceeding one-fifth of the total capital or such smaller proportion as may be prescribed by the rules.] 
30. Share or interest not liable to attachment. - Subject to the provisions of Section 22, the share or 
interest of a member in the capital of, or contribution  to, a registered  society shall not be liable to 
attachment or sale under any decree or order of a Court of justice in respect of any debt or liability 
incurred by such member and neither the Official Assignee under the Presidency-towns Insolvency Act, 
1909 (3 of 1909) nor a Receiver under the Provincial Insolvency Act, 1920 (5 of 1920) shall be entitled 
to, or have any claim on, such share, interest or contribution. 
31. Restrictions on transfer of share or interest. - (1) The transfer of charge of the share or interest 
 
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of member in the capital of registered society shall be subject to such conditions as the maximum 
holding as may be prescribed by this Act or by the rules. 
(2) In case of society registered with unlimited liability, a member shall not transfer any share held by 
him or his interest in the capital or property of the society or any part thereof unless,- 
(a) he has held such share or interest for not less than one year; and 
 
(b) the transfer charge is made to the society or to a member of society or to a person whose 
application for membership has been accepted by the society. 
 
32. Liability of a past member and of the estate of a deceased member. - The liability of a past 
member or of the estate of a deceased member for the debts of a registered society as they existed on 
the date of his ceasing to be a member or of his decease, as the case may be, shall continue for a 
period of two years from such date. 
 
CHAPTER V 
 
 
Audit and Inspection 
 
 
33. Audit. - (1) The Registrar shall audit or cause to be audited by some person (hereinafter referred to 
as the auditor) authorised by him by general or special order in writing in this behalf the accounts of 
every registered society once at least in every year. 
(2) Every officer or member of the society shall furnish such information in regard to the transactions 
and working of the society as the Registrar or the auditor may require. 
(3) The audit under sub-section (1) shall be conducted according to the rules, and shall include an 
examination of over due debts, if any, the verification of the cash balance and securities a valuation of 
the assets and liabilities of the society. 
(4) The auditor shall submit a report on such examination, verification and valuation, and shall include 
in his report a statement of:- 
(a) every transaction which appears to the auditor to be contrary to law or to the rules or bye-laws 
of the society; 
(b) the amount of any deficiency  or loss which appears to have been incurred by the culpable 
negligence or misconduct of any person; 
 
(c) the amount of any sum which ought to have been but has not been brought into account by any 
person; and 
 
(d) any money or property belonging to the society which has been misappropriated or fraudulently 
retained by any person taking part in the organization or management of the society or by any 
past or present officer of the society or by any other person. 
 
(5) The Registrar may determine the sum to be paid by any society towards the cost of auditing its 
accounts  under  this  Section,  and  such  sum  shall  be  paid  by  the  society  in  such  manner  as  the 
Registrar may direct. 
34. Inspection by Registrar. - The Registrar may from time to time inspect a registered society himself 
or cause it to be inspected by some person authorised by him in this behalf by general or special order. 
35. Inquiry by Registrar. - (1) The Registrar may of his own motion and shall, on the request of the 
Collector, or on application of a majority of the managing committee, or of not less than one-third of the 
 
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members, hold an inquiry, or direct some person authorised by him by order in writing in this behalf to 
hold an inquiry, into the constitution, working and financial condition of a registered society. 
(2) The Registrar or the person authorised by him under sub-section (1) may:- 
 
(a)  require  an  officer  of  the  society  to  call  a  general  meeting  at  such  time  and  place  at  the 
headquarters of the society, and require the society to take into consideration such matters, as 
he may direct, and 
 
(b) if the officer of society refuses or fails to call such a meeting or if there be no quorum at a 
meeting so convened, call such meeting himself by giving notice to the members in such a w

Excerpt shown. Open the full act in Lexace.

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